Let D = Demand, S = Supply, P = Equilibrium

question 249

Multiple Choice

Let D = demand, S = supply, P = equilibrium price, Q = equilibrium quantity. What happens in the market for electric vehicles if the government offers incentives to manufacturers to produce more electric vehicles?

• A) D increases, S no change, P and Q increase
• B) S increases, D no change, P decreases, Q increases
• C) D and S increase, P and Q decrease
• D) D no change, S increases, P decreases, Q decreases

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Definitions:

Registered Market Makers

Entities authorized to both buy and sell specified securities on a continuous basis to maintain liquidity in the financial markets.

Short Sale

This is a trading or investment strategy where an investor sells a security they do not own, expecting its price to decline.

Margin Required

The minimum amount of funds that must be deposited with a broker when borrowing to buy securities or entering into a futures contract, serving as collateral.

Over-the-counter

A decentralized market, without a central physical location, where participants trade stocks, commodities, currencies, or other instruments directly between two parties and not through a central exchange.